[vc_row][vc_column][/vc_column][/vc_row][vc_row][vc_column width=”1/4″][vc_separator color=”sky”]Part 1: INTRODUCTION[vc_separator color=”sky”]Part 2: METHODOLOGY[vc_separator color=”sky”]Part 3: FMCG[vc_separator color=”sky”]Part 4: HEALTH[vc_separator color=”sky”]Part 5: FINANCE[vc_separator color=”sky”]Part 6: TEXTILE[vc_separator color=”sky”]Part 7: HOUSING[vc_separator color=”sky”]Part 8: TELECOMMUNICATIONS[vc_separator color=”sky”]Part 9: DIVERSIFIED MANUFACTURING[vc_separator color=”sky”][/vc_column][vc_column width=”3/4″][vc_single_image image=”2200″ img_size=”medium”][vc_column_text css=”.vc_custom_1455704221735{padding-right: 10px !important;padding-left: 20px !important;}”]
Part 3: FMCG
The list of enterprises include Hindustan Unilever Limited, Britannia Industries, Nestle, ITC, Mother Diary, Amul and Cargill India.
Hindustan Unilever Limited
Hindustan Unilever Limited (HUL) is India’s largest Fast Moving Consumer Goods Company with a heritage of over 80 years in India and touches the lives of every two out of three Indians. HUL works to create a better future every day and helps people feel good, look good and get more out of life with brands and services that are good for them and good for others. They have 35 brands spanning 20 distinct categories such as soaps shampoo, skincare, et al. Unilever has emerged as a Inclusive business leader through its several impactful and innovative programs.
Hindustan Unilever is implementing societal value creation by tapping opportunities into their value chain and expanding their reach through different activities and initiatives aligned with their business operations & practices. Out of various projects, Project Shakti has been able to deliver and create a positive impact on the people at the bottom of the pyramid. Launched in 2001, Project Shakti, empowers underprivileged rural women by training them in health and hygiene and allowing them to undertake income-generation activities. The women, known as Vanis (communicators), sell soap, shampoo, and other personal care products through social forums such as schools and village gatherings.
Project Shakti Entrepreneurs who are commonly known as Shakti Ammas reach out to over 4 million households across 1,65,000 villages spread over different states. These 4 million household forms a new market for HUL where its products are sold, generating revenue for the company. This model ensures an expanded reach to HUL’s products and employment opportunities to the overlooked sections of the society. HUL earns revenue and provides a means of livelihood to approximately 70,000 women entrepreneurs. It promotes skill development by providing training in sales practices, financial knowledge, and bookkeeping to help them become micro-entrepreneurs. The company is set to increase the number of Shakti entrepreneurs that they recruit, train and employ to 75,000 in 2015. Shakti Ammas are complemented by 48,000 Shaktimaans, who are typically the husbands or brothers of the Shakti Ammas. Shaktimaans sell HUL’s products on bicycles in surrounding villages, covering a larger area than Shakti Ammas can cover on foot.
Alliances with telecom & banking companies have also been established to increase the income of the Shakti family with the sale of prepaid telecom currency, SIM card activations and by acting as a banking correspondent. Low-cost IT solution called Shakti Mobile, mini – ERP running on an entry-level smartphone, allows Shakti Ammas to take bill orders and manage inventory. The mobile based application also offers promotional & discount offers to the consumers. Traditional business models didn’t work in the hinterland and creating a successful model of micro-entrepreneurs in the rural area created a new distribution system for HUL giving them a competitive advantage over its peers.
HUL is one such company that believes that creating income is more important than generating sales alone. It’s projects have served as a catalyst for opening new markets as well as creating rural microeconomics impacting many households. It resulted in increased revenues for HUL and helped in sustainable livelihoods of rural people.
Apart from its various large scale programs and initiative, HUL has been handling various societal issues by launching new products. The company has also addressed health problems in the area of poor hygiene for rural India. Lifebuoy, an 18-gram bar, was introduced in 2002 that was priced at two rupees and for one person to wash their hands once a day for ten weeks. It was priced only at two rupees. Apart from making the soap affordable even to people with no income, the company launched education campaigns in eight Indian states where deaths from diarrhoea-related diseases are highest, and soap sales are lowest. Lifebuoy has achieved a double-digit growth to become the world’s number one antibacterial brand, and it represents a good example of how brands can serve a social purpose while making a commercial success.
HUL is highly responsible towards the environment it operates in and aims to achieve the following missions by 2020. Under its sustainable living plan, HUL plans to double the size of our business while reducing their negative impact on the environment and increasing their positive social impact. They have three big goals that are to be reached by 2020.
- Improve health and well-being of more than a billion people
- Reduce environmental impact of its products
- Enhance the livelihoods of millions working across their value chain
As an increasing number of people are opting brands with a social touch, Unilever’s initiatives will open more new avenues of market opportunities and growth for HUL.
Britannia Industries
Food industry can play a leading role in addressing the nutritional needs and challenges of society ranging from eliminating hunger and fighting malnutrition. The sector is a crucial employer in majority of developing nations providing a source of livelihood to millions of people. Food companies can create competitive advantage for themselves by fortifying their products with vitamins and minerals that can nutritional deficiencies.
Britannia is one of the leading food company and one of the most trusted, valuable and popular brands in India delivering products in 5 categories through its 3.5 million outlets across India. The company estimated that nearly two out of every three Indian children suffers from anaemia. Anaemia in children limits their ability to focus and diminishes their energy affecting their education and other day to day activities. The disease is not visible to naked eye and parents fail to judge the symptoms, leaving the ailment undiagnosed and untreated.
Britannia Nutrition Foundation works to fight malnutrition in the country by providing products enriched in micro-nutrients to curb malnutrition among the underprivileged children. The company tested the idea of a micronutrient-fortified biscuit in 2007 through a partnership with the Global Alliance to Improve Nutrition (GAIN). A pilot program reaching 150,000 children was a success, resulting in improved haemoglobin levels, the company went to market with a new banana-flavoured, iron-fortified Tiger biscuit. Tiger Biscuits that are fortified with Ferrous Fumarate, an iron salt recommended by WHO for cereal based products, a source of iron that helps in fighting anaemia among malnourished children. The biscuits, fortified with iron, have an appealing design to appeal to children and are affordable by the weaker section of the society. The brand advertising of Britannia’s products have been more inclined for issue awareness. In order to address the challenge of lack of access to mass media in rural India, the company supports local efforts to educate people on issues of childhood iron deficiency & malnutrition. It also has partnerships with Nandi Foundation & GAIN (Global Alliance for Improved Nutrition) to expand its nutrition initiative through midday meals in schools.
Developing a new product that addresses an important issue of iron deficiency, Britannia has created a competitive advantage over its peers. Tiger has been the largest product for Britannia since 1997 and is also the second most business brand. Although, the profit margins for the product is low but due to its societal benefits the product sales are high in volume and delivers profits. During a 2009 pilot study in North Delhi, Britannia and the Navjyoti India Foundation found that consumption of fortified Tiger biscuits, in conjunction with treatment for hookworms, raised the iron levels of more than 300 anaemic children by an average of more than 25 percent in 90 days.
Improving nutritional deficiencies by Britannia has helped it maximize both business and social benefits.
Nestle
NESTLÉ is the world’s leading Nutrition, Health and Wellness company. Its mission of “Good Food, Good Life” is to provide consumers with the best tasting, most nutritious choices in a wide range of food and beverage categories and eating occasions, from morning to night.
Nestle is a business pioneer leading the way in adoption of the shared value concept as a part of their core business strategies globally. The company does business in a way that deliver long-term shareholder value and benefits society.
Nestle is socially inclusive in the following three areas:
Nutrition: Providing nutritious products at an affordable price that offer real health benefits to consumers. Products are more accessible to consumers through innovations and partnerships. Nestle’s START HEALTHY, STAY HEALTHY is an educational initiative in partnership with doctors that aims at making right nutrition as a way of life and create a healthier generation. It has launched Nestle Healthy Kid Programme in the year 2009 to make children understand the importance of nutrition and physical activity. Till the year 2013, over 27000 students in India, Bangladesh and Sri Lanka have successfully participated in the programme. Nestle has 32 research, development and technology facilities worldwide with one of them in India to help Nestle’s ability to respond to consumer needs faster.
Water: Optimizing the use of water in manufacturing and sourcing processes in ways that benefits others in the supply chain. Uses resource more efficiently across the entire value chain. Nestle’s water awareness programme reaches out to school children, farmers, women and employees. Through its Clean Drinking Water Project, 135,000 village school students have benefited directly across the South Asia Region. India has invested in 172 water projects, and many more are planned. Waste water discharge per tonne of product in India reduced by 78% due to reusing of water and efficient processes that reduce water need.
Rural Development: Supports farmers in rural areas that help them provide with raw materials required for their operations. It secures continued access to quality inputs and strengthening the customer base. It further improves conditions for local economic and social development. Nestle’s Dairy Development Programme for Women Dairy Farmers have benefitted over 58,600 women. Through this programme, Nestle runs special training programmes for village women on good dairy farming practices. It has ensured sustainable livelihood to dairy farmers across 33 districts. Nestle’s milk factory in Moga has around 110,000 farmers that supply nearly 1.3 litres of milk every day that creates a flourishing milk economy in Moga. It has resulted in a sustained long-term growth for both Nestle and the community.
ITC
ITC’s business and value chain generate sustainable livelihood for around 6 million people most of which includes the economically weaker section of society. It has a diverse product portfolio offering tobacco, hotels, paperboards, packaging, agri-business and branded apparels. ITC identified business opportunity in uplifting the agricultural practices of the farmers. The sector contributes nearly 17% to the nation’s GDP, and the plight of farmers is often ignored. As an outcome of government’s lack of concern for farmers, most Indian farmers have remained quite weak despite improvement in India’s agricultural productivity.
ITC’s Agri Business Division that is one of India’s largest exporters of agricultural commodities and has opted the e-choupal business model. E-Choupal is conceived as a more efficient supply chain that delivers value to customers across the globe on a sustainable basis.
The model has been specially designed to tackle the challenges posed by fragmented farms, the involvement of middlemen & intermediaries, and weak infrastructure in the agriculture sector.
The most innovative inclusive business initiative has been the e-Choupal programme, which has empowered farmers, raised rural income and developed the rural ecosystem. The model was launched as an effort to re-design procurement of soy, tobacco, shrimp, wheat and other cropping material required by the company. The model has created highly profitable distribution and product design channel for the enterprise. Under this model, ITC procures its material directly from farmers that result in cost savings in warehousing and delays. It also led to consistency and predictability in the supply chain. eChoupal promotes the use of IT to set up vast networks and logistics even in remote areas that are not accessible. The use of IT has brought transparency, increased access to information, catalysed rural transformation while enabling efficiencies and low-cost distribution that make the system profitable and sustainable.
Farmers are provided with critical information and relevant knowledge on farm productivity, prices and markets through the e-Choupal digital infrastructure and also access to quality inputs for better productivity. The company has set up integrated rural service hubs called Choupal Saagars which offer multiple services under one roof. Sustainable livelihoods opportunities for over 40,000 rural women as part of its various innovative programmes either through micro-enterprises, or assistance with loans to pursue income generating activities, including rolling incense sticks for its agarbatti business.
ITC also has a dedicated commitment on waste recycling that is implemented by its paperboards and specialty papers division to focus on ‘reduce-reuse-recycle’ approach to protect & restore the environment. Ultimately the program enables provision of cost-competitive raw materials to industries such as the paperboards and paper that has led to a cascading effect on improving the income of rag-pickers and municipal workers.
The e-choupal initiative shows us how a large corporation can combine a social mission as a part of its business model and create a positive impact on the society.
Mother Diary
Mother Dairy Fruit & Vegetable Pvt. Ltd., set-up in the year 1974, is a wholly owned company of National Dairy Development Board (NDDB). dairyThe company has a diverse portfolio with products in edible oil, fruits & vegetables, milk & milk products and many others.
Mother Dairy’s business philosophy is inherently linked with the co-operative movement in India and is focused on serving farmers, rural societies, and consumers fairly. The business model adopted by Mother Dairy assures a platform for farmers to sell their products. Unlike other organizations, their objective is not to maximize the profits but to provide the best price to farmers for the products that they supply.
The value chain of mother dairy is designed such that the procurement of its product benefits the farmers and the rural people. Their value added products contributes to the bottom line and enable growth to a larger level. They have a simple process of sourcing milk from the farmers by providing the best price for it. Mother Dairy ensures that milk producers and farmers continually receive market price for offering milk, milk products, and other food products.
Mother Dairy also promotes the Bulk Vended Milk, better known as ‘Token’ milk. It serves hygienic milk to the consumer in an unpacked condition. It sells approximately 10.5 lakh liters of token milk in Delhi alone and thus ensures more than 5 tons less consumption of plastic in Delhi every day. Thus, Mother Dairy have been addressing a social problem and driving economic value for themselves in doing so.
These mutually benefiting activities culminates to a competitive price to the consumers with guaranteed supply of Mother Dairy’s products. Mother Dairy also works towards improving the standard of living of farmers. They ensure that the farmers get an appropriate price for their yield, educate them on better farming techniques, hygiene practices and modern methods of dairy farming. This initiative eventually leads to farmers being independent and financially self-sustainable. Mother Dairy gains a competitive advantage by controlling the entire chain and extracting value at every point of the chain.
Addressing the social challenges in the area of agriculture they have positively impacted 250,000 individuals across the country and have spent more than 1600 crores on these activities (as of FY 2013).
Amul
Amul was founded in 1946 to stop the exploitation of farmers by the middlemen. In order to get rid of the middlemen the farmers formed their own co-operative that had procurement, processing and marketing under their control. The success made by Amul then could be attributed to four factors – farmers owned the dairy, representatives elected by them managed the village societies and district union, professionals were employed to operate & manage the dairy business and the co-operatives were sensitive to the needs & demands of farmers. In 1965, NDDB (National Dairy Development Board) was setup with the objective of replicating the Amul Model.
Amul’s model of dairy development is a three-tiered structure of the dairy cooperative societies at the village level joined under a milk union at a district level.
The three-tier structure of Amul eliminated the middlemen by procuring milk from the farmers and supplying it directly to the consumers.
The Amul model has three main tiers.
- Establishing a direct linkage between farmers and consumers by eliminating middlemen
- Milk Producers (farmers) control procurement, processing and marketing
- Professional management
Millions farmers and their families have ensured a better standard of living through the non-exploitive business model of Amul. The model has helped India to emerge as the largest milk producers that pour their milk in 1,44,500 dairy cooperative societies across India. Processing of milk is done in 184 District Co-operative Unions and marketed by 22 State Marketing Federations. Amul’s business model has become an example for many and has paved way for different enterprises to adopt the same approaches.
Amul has been serving millions of people while benefiting the society and deriving economic benefits. It has adopted and implemented an ideal model showcasing inclusive nature of the business. The management strategy is focussed on uplifting the standard of living of farmers which ensures a continuous supply to consumers. The reformist decisions by Amul has resulted in inclusive growth through its work with dairy farmers at grassroot level, changing & enhancing lives and empowering women, and at the same time derived business benefits. Amul offers around 80% of the consumer money back to the farmers compared to 35-40% in the western markets. Amul has meaningfully contributed to building inclusive growth creating a brighter future not only for some but all citizens. Its activities of helping the people at the bottom of the pyramid have served an important milestone in the advancement of societal development. Amul’s model of development has been replicated across different states and benefited nearly 100 million farmers.
Amul has not been far behind in implementing innovative solutions to its customers. Their IT network has linked production centres with the sales office and dealers by VSAT & e-mail connectivity. It is one of the largest It operates through 56 Sales Offices and has a dealer network of 10000 dealers and 10 lakh retailers, one of the largest such networks in India. The company also has commitment to protect the environment and actively works towards it through its tree plantation initiative. Since 2007 to 2014, 518 lakh trees have been planted by the milk producers of Gujarat Dairy Cooperatives. A unique feature of this tree plantation programme initiated by the dairy producer is that they protect the tree saplings till it survives and grows into a tree.
Amul is not just a brand, it has grown into a movement that represents economic freedom of farmers. It has instilled a feeling a confidence and self-respect among farmers and have encouraged them to dream and to hope.
Cargill India
Cargill started its operation in India in the year 1987. The business includes food ingredients, refined oils, wheat, flour, grain and oilseeds, sugar, cotton, animal feed and trade and structured finance. They employ more than 2,000 employees that are working at their plants, offices, warehouses and depots. Cargill provides quality food, agriculture, financial and industrial products and services to the world.
Cargill’s decision to fortify oils in the year 2008 acted as the catalyst for oil fortification trend in India. Cargill fortified their edible oils – NatureFresh and Gemini to bring a product to the market that helped nourish millions of people suffering from malnutrition with vitamins they desperately need. Nourishing India is the cornerstone of their business practices, and they have various programs to improve nutrition in India. Fortification of edible oils produced in India with Vitamin, D & E helps was a meaningful move by Cargill as it sells more than half million ton of edible oil in India each year.
India, the second most populous country in the world, is home to 194 million malnourished people, 40% of which accounts for children. Cargill realised that edible oils is the staple product for Indians and is used in almost 99% of Indian households. Fortifying edible oils has helped prevent the population from issues from blindness to vulnerability to infections. Following this trend, many competitors swayed into action and adopted oil fortification. Thus, one act of doing good spread to other edible oil manufacturers that ultimately protected the people in India from malnutrition.
To improve nutrition and food security, the helped established India Food Banking Network, together with Global Food Banking Network (GFN) to support feeding programs across India. They have also committed themselves to make fortified food available through government’s public distribution system. The company has also been improving education and livelihoods by implementing programs like Kutch Livelihood & Education Advancement Programs in Partnership with CARE. It will help uplift the poor farmers by increasing their income opportunities and also improving access to primary education for children. The program aims to impact 40,000 children, 9,000 households and over 200 villages. Cargill aims to develop the lives of farmers in Kutch through ‘earning and learning’.
Different projects have been started to support rural and community development. The company is keen to bring about positive and measurable improvements to society through its initiatives and activities that are revolving around its core value proposition. Some of their community programs include
- Works with United Way Delhi to alleviate urban poverty.
- Sponsors students’ education in rural areas of Andhra Pradesh through Rural Development Foundation.
- Supports Pragati Vatika School in Gurgaon to provide education to children of daily wage laborers.
- Teamed-up with Mobile Crèches and adopted a daycare center for children of construction workers.
Cargill continually innovates products, solutions, services to meet better the needs of customer.
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